Diamond Circle Capital Plc Interim Management Statement (3166R)
16 11월 2012 - 6:53PM
UK Regulatory
TIDMDIAM
RNS Number : 3166R
Diamond Circle Capital Plc
16 November 2012
INTERIM MANAGEMENT STATEMENT
MARKET COMMENT
The diamond market has been in a clearly bearish mode since the
end of the first semester.
After good initial resistance in the first part of the year,
especially in relative terms, the combination of a swath of
negative developments eventually proved too much for the market to
bear. From a macroeconomic perspective, the absence of substantial
job creation in the US, the weak spot in Chinese growth, and
seemingly endless worries over fiscal imbalances in the eurozone
resulted in overall risk aversion from diamond investors and
dealers alike.
This risk aversion was further compounded by the fact that rough
prices at miners' level remained for an extended period of time
stubbornly out of sync with prices witnessed on the polished side.
Last but not least, the inability of the Indian rupee to bounce
back durably from all-time lows mechanically weighed on final
demand.
As a result, the PolishedPrices Diamond Overall index decreased
over the period by a steep 8.4% (as at the beginning of November)
while the Composite Rough Diamond Index resisted comparatively
better, with a consolidation limited to 5.3% (but after having
retreated by close to 40% from August 2011 highs...).
As is usually the case in bearish markets, price falls affected
all categories of diamonds. RAPI indices for 0.30, 1.50, 1.00 and
3.00 carat were down respectively 8.4, 10.8, 11.9 and 11.3% year to
date, while coloured diamonds outperformed whites overall.
The duration and breadth of the consolidation lead some
commentators to say that a rebound may soon occur but, in this
regard, it should be underscored that share prices of leading
diamond producers continue to creep downwards (Gem Diamonds' market
capitalization has been halved since March while Petra Diamonds
seems just unable to recover from its 3-year lows), which should
certainly inspire further cautiousness down the road.
FUND ACTIVITY
Following the acquisition by Mr Chatila of 62.29% of the voting
of the Company in June, shareholders decided at an Extraordinary
General Meeting held on 12 July that "the Company will now be
managed with a view to realising its existing portfolio of diamonds
in an orderly and timely manner and returning the net proceeds of
sale to shareholders at such times and in such manner as the Board
may in its absolute discretion determine."
In accordance with this revised investment objective and policy,
the entire collection of diamonds (11 stones) held by the Company
has now been realised. Net aggregate proceeds after all selling
commission and costs amount to $ 36.4 million, compared to a
carrying value of $44.0 million.
Now that the entire portfolio has been realised the Board has
instructed its advisers to prepare the necessary documentation to
liquidate the company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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